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Smart Speaker Market Continues to Grow

Smart home speaker systems are hitting mainstream adoption around the world, Strategy Analytics report finds.
Posted Dec 18, 2017
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The rate of adoption of smart speakers continues to defy expectations, and there are clear signs that the market is starting to move from the early-adopter phase to mass market acceptance, according to Strategy Analytics' Quarterly Smart Speaker Vendor and OS Market Share: Q3 2017 report.

And despite a number of new players, including Baidu's Duer system, entering the market, Amazon and Google shared 92 percent of the global market in Q3. Wider country availability and new models will drive combined Google Home and Amazon Echo sales to 12 million units globally in final quarter, the research firm reported.

"Competition in the smart speaker market is becoming fierce as the fledgling category welcomes new entrants, such as Harman Kardon, Sony, and Sonos, all of whom have a much richer audio heritage than Amazon or Google. The Silicon Valley giants have reacted by improving the audio quality of their flagship devices, but their real advantage over the competition is their ability to shift significant volumes of their aggressively priced Echo Dot and Google Home Mini that will keep them well ahead of the competition for the foreseeable future," said David Watkins, director of the new smart speaker service at Strategy Analytics, in a statement.

"The competitive landscape will heat up even further in 2018, and we expect to see the introduction of a new wave of third-party devices that support one or even both of the Alexa and Google Assistant voice AI platforms. All of this activity will, of course, pile more pressure on Apple, whose own Siri-based HomePod speaker failed to materialize in time for the holiday season and will now make its debut in 2018. Apple is falling well behind Amazon and Google in the AI and virtual assistant race, and its famed ability for hardware innovation may not prove enough to counter the fast-paced AI-software innovation of its rivals," he concluded.

Other key findings from Strategy Analytics' latest smart speaker quarterly report include the following:

  • North America dominated sales of smart speakers in Q3 2017, with nearly 75 percent global share, although growth in Western Europe and Asia Pacific will reduce that share in Q4.
  • Amazon Alexa's AI operating system fell to 69 percent share of smart speakers in Q3, down from more than 80 percent in the first half of 2017, as Google Assistant made strong gains following the launch of Google Home in a greater number of territories.
  • The Chinese market started to show shoots of growth in Q3, driven by new device launches from Alibaba and Xiaomi, although JD.com with its Dingdong speaker remained the top-ranking brand in China during the quarter.

Global Smart Speaker Market by Vendor: Q3 2017(Shipments in Millions of Units)

Vendor

Q3 '17 Shipments

Q3 '17 Market Share

Q3 '16 Shipments

Q3 '16 Market Share

Growth Y/Y

Amazon

5.0

66.9%

0.9

93.5%

478%

Google

1.9

25.3%

0.0

0.0%

~

JD.com

0.1

1.6%

0.0

0.0%

~

Xiaomi

0.1

1.3%

0.0

0.0%

~

Alibaba

0.1

0.9%

0.0

0.0%

~

Others

0.3

3.9%

0.1

6.5%

383%

Totals

7.4

100.0%

0.9

100.0%

708%

Source: Strategy Analytics Smart Speaker service

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